The new May 2006 report shows while base pay decreased slightly, the average total cash compensation per executive set a new high of $5,162,298. The previous second-period high of $3,683,131 total cash compensation was set in 2001, prior to September 11.
Base Salaries
The average base salary for the highest-paid executives and based on companies reporting year to date stood at $1,276,371, compared to 2005 base salary levels of $1,277,944. This reflects a 0.12% decrease in base compensation over 2005.
Annual Bonus
Annual cash bonuses increased 63% over 2005 for the highest-paid executives. The average annual cash bonus stood at $3,885,927, compared to the 2005 annual cash bonus level of $2,375,615 for the highest-paid executives.
Total Cash Compensation
The 2006 average total cash compensation (base bonus) was $5,162,298 compared to 2005 total cash compensation of $3,653,559 for the highest-paid executives. This reflects a 41.3% increase in total cash compensation over 2005 levels.
Total Cash Compensation Change Since 1997
The May 2006 Index of Total Cash Compensation stood at 212.5 compared to the 1997 index level of 100. Since 1997, total cash compensation for the highest-paid executives has increased 112.5%.
Revenue Change Since 1997
The Average Company Revenue Index in the May 2006 report stood at 207.2 compared to 100 for the base index year of 1997. Since 1997, average company revenues have increased 107.2%. The May 2006 report also shows total cash compensation increasing faster than company revenues.
"Company revenues have increased 107.2 percent, while total cash compensation has increased 112.5% since 1997," says ERI Director Dr. David Thomsen. "The trend of company revenues increasing faster than total executive compensation has reversed."
The entire ERI Economic Research Institute/CareerJournal.com Executive Cash Compensation Index and Report can be found at: http://www.erieri.com/pdf/may-2006-executive-pay.xls. Data is based on companies reporting for the second period of 2006. This average "comparables" group is from the population of publicly traded corporations, which in itself has been decreasing in size (after Sarbanes-Oxley).
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